NCUA Board OK's 3% Budget Increase; Lowers Oper. Fee
The NCUA board last week approved a 3% spending increase for next year, which includes a reduction in staff by eight positions to a five-year low of 963.
The new budget will enable NCUA to lower the annual operating fee rates charged federal credit unions by 6%, even while raising $4 million more from federal credit unions because of a projected growth of 10% in assets in 2003.
The board also approved a reduction in the controversial overhead transfer rate, the amount of the agency's expenses that are assigned to the cost of managing the National Credit Union Share Insurance Fund (NCUSIF), to 60% from the 62% assessed in each of the last two years.
Separately, NCUA also said that net income on the NCUSIF continued to plummet due to lower returns on the fund's $6 billion investment portfolio, virtually guaranteeing that federally insured credit unions won't see a dividend on the fund for last year. For the first 10 months of 2003 net income on the fund declined more than two-thirds to $20.2 million, from $102 million for the same period last year.
Next year's budget includes 4.1% pay raises for all NCUA employees, the same pay raises approved for congressional staffers. Those pay raises are slightly higher than the average 3.5% pay raises in each of the past two years.
The budget also includes:
* $450,000 to install broadband Internet services in the homes of all NCUA examiners, as the agency has the highest rate of telecommuters in the federal government.
$450,000 to hire an outside management consultant to manage unionizing efforts by agency employees.
* $700,000 for repairs to NCUA's Virginia headquarters building.
Also included is $1 million in spending to complete the agency's reorganization, including moving the West Coast region VI office from San Francisco office to Arizona, and to close the region IV office in Chicago.